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Friday,
December 7, 2001, Chandigarh, India  
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Enron cannot sell DPC stake unless
Lessons from American management
Scale down export target: FIEO |
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UTI: no redemption pressure for US-64 Direct tax collections up
Rites bags contracts
SBI interlinks ATM in 9 cities
Escotel slashes call charges
HC bar on gas export to India
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Enron cannot sell DPC stake unless Mumbai, December 6 “Enron is free to sell its stake in DPC to anybody, anytime and anywhere, but only after it settles the dues, running into several thousand crores, to the Indian lenders”, a senior FI official told PTI here today. Following its bankruptcy, Enron Corp has either been pulling out of its worldwide operations or trying to reorganise them to raise funds. Holding 65 per cent stake along with GE and Bechtel who have 10 per cent each in DPC, Enron has said it wants to exit India, but two potential
Indian buyers — power utlities Tata Power Company (TPC) and BSES Ltd — have not yet signed the confidentiality agreement to carry out due diligence for the distressed 2,184 MW project. “The reason is clear, TPC, BSES and FIs are closely monitoring the developments. Of course, they will try a hand on hard bargain since the value of DPC was depreciating due to its distressed sale”, he said. The IDBI led FIs have an exposure of upto Rs 6,204 crore and unlike the foreign lenders who have pumped in $ 600 million in the vexed project, they would not be able to get their funds back in case of a default by DPC. However, the official did not deny that the FIs would have to take a hit on their books in 2002 to the tune of over Rs 600 crore, if DPC does not pay interest for December 2001 and March 2002. Enron Corp’s bankruptcy would have a lesser impact on the Indian financial institutions, he asserted. “If these loans remain unpaid, we have the right to exercise the option of taking over the plant as our funding has been on a non-recourse basis and DPC’s assets and liabilities are already pledged with us”, he added. The ISBI Chairman, P.P. Vora, had recently reiterated that DPC was not an “NPA” and that the company had paid its quarterly interest for phase one loans by September 30. The official said DPC’s daily interest chargeable is upto Rs 3 crore and the another quarterly payment is due on December 30. However, a senior analyst following Enron Corp’s bankruptcy said that IDBI and others might need new capital as a result of their DPC exposure if the loans “trespass” into being non-performing assets. “This could create a problem as FIs and banks should be able to meet minimum capital requirements and provisioning standards”, he said. The IDBI has an exposure upto Rs 2,121 crore, ICICI — Rs 1,473 crore, SBI — Rs 1,749 crore, IFCI — Rs 454 crore, Canara Bank — Rs 407 crore in the project which has stopped generating power since June, after Maharashtra State Electricity Board refused to offtake power, alleging that the multinational had misrepresented its capacity.
PTI
Enron axes DPC staff After filing for bankruptcy protection in the United States, Enron Corporation has axed its over 150 employees in India but retained Dabhol Power Company’s Managing Director K.Wade Cline and few others on a contract basis as its “core team”. A day after it filed the bankruptcy suit in US courts last Sunday, Enron Corp communicated its decision to lay off the employees of DPC and Enron India with December 7 as a deadline. DPC spokesperson said the company regrets that it would lay off all its “remaining” employees in India including those based at the site of the $ 3 billion plant.
PTI |
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Lessons from American management GERALD
Greenwald is the typical American story of the son of an immigrant Jew family who had to earn his way through college and hard-work his way into the club of super-achiever path-finder American Managers. The beauty is that he won his spurs in races which were traditional preserves of engineers and bean-counters. His graduation was in public and international affairs. The essence of his success lay in team-honing and team-play. Foundations of this trait were laid when he was still in college: his team of 9 could clear and lay a table for 250 in the dining hall in 24 minutes flat. His career began at Ford, soon after the Edsel debacle. Henry Ford II, surrounded by his yes-men ruled it as a spoilt despot and emperor. In a company well-known for its anti-semitism, it was surprising that he soon picked up for the fast-track. Fast-track too him through Brazil, France, England and Venezuela and experience with diverse cultures and widening responsibility: finance; labour relations; products. The last gave him opportunity to run a total company as his own; also an experience of a country where kidnapping for ransom was common. Ford also taught him what goes wrong. Dissent was just not permissible to the man whose name was on the building and he constantly reminded you of his power. Witch hunts and spy-runs were common. The very best were fired on the spot for aggressive ideas: Laccoca, Sperlich. In that game wasted resources, paperwork and chewed-up ideas were legion. Hierarchy and petty status symbols was life. His chance to say goodbye to Ford came in the Chrysler baleout with Laccoca and endless negotiations with bankers and creditors for the relief package. He also learnt the art of political networking where egos dominated and just being right cut no ice. He had to agree to Russel’s price of immediate sacrifice by workers for long-term compensation through ESOP’s at Chrysler. Rescue of the tons of agreement documents by his team through fire in the last seconds re-affirmed his confidence in team-work. He also got his lesson in fancy market research. Ask the question who did it, and; sometime gut instinct is far better. 11 years was long enough to move on. Fate took him to the unique $ 2 billion plus management buyout of United Airlines, first as a shadow CEO taking it through the difficult creditor-employee negotiations and then running the company. Self-ownership by a 76,000-man troop is easier said that done; it meant immediate pay-sacrifice for long-term compensation via stock ownership. Reconciliation of group and individual interests of different layers was not easy; flight attendants refused to join. Board composition and overall policy to resolve conflicting group-interests itself took time to evolve. Eternal worker-management conflict posed some of the trickiest: right to hire and fire; downsizing in a recession. Pioneering the concept through formative years required every human skill. To make people accept that ownership was not free licence and the customer alone was their job provider and came first, was not easy. But answers were worked out by Greenwald bit by bit. United became the most successful and profitable of the US airlines and in period when global airline industry has been passing through a crisis. Management buyout is an interesting option in PSU disinvestment. Recent attempt at management buyout in CMC was most heart-warming. An excellent opportunity for creating a new business model was lost in the exercise of government option in favour of direct cash-sale to TECS. Wasn’t it an antithesis of the philosophy that we preach to family-owners: professionalise management. Shouldn’t we take courage from successes like Unilever, General Motors, IBM, ITC and Shell? |
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Scale down export target: FIEO New Delhi, December 6 “Poor productivity of labour is impacting our performance and though both the Commerce and Finance Ministry are concerned about falling exports, the Labour Ministry does not seem to be pushing the agenda of labour reforms,” S.K. Saraf, Vice-President of (FIEO), told PTI here. Saraf, who is also officiating President of FIEO, said “with less than four months to go before the fiscal ends, and exports during April-October showing a decline of 2.88 per cent, the government should scale down export target from 12 per cent to a more realistic level of 6-7 per cent”. He said non-implementation of government policies was hurting exporters the most, particularly slow pace of labour reforms. “We have had economic reforms, technical reforms and fiscal reforms, but nothing has happened on the labour front”. A hire and fire policy or contract labour would not cause unemployment or loss of jobs, he said. “This is a misplaced notion. Improvement in labour productivity will make Indian goods more competitive, increase their demand which in turn will generate more demand for labour”, Saraf reasoned. In addition to this, the government should immediately clear pending drawback and announce continuation of DEPB benefits as exporters were avoiding booking new orders in the face of the
uncertainty over continuation of the scheme beyond March 2002. The government should also extend for atleast five years the income tax benefits to exporters under Section 80 HHC as it was not non-WTO compatible, Saraf said. He said that the export incentives given to exporters were required as it merely amounted to reimbursement of the transaction costs which were very high in India. “At present exporters spend all their time moving their cases between the Finance and Commerce Ministries,” he added.
PTI |
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UTI: no redemption pressure for US-64 New Delhi, December 6 “The US-64 redemption pressure has been low. In November the redemptions were
Rs 48 crore as compared to Rs 88 crore each in the previous two months,” UTI Chief M. Damodaran said here after meeting top Finance Ministry officials today. He reiterated that the UTI would stick to January 1, 2002 deadline of converting US-64, the monthly scheme, into net Asset Value (NAV) based scrip. UTI which resumed US-64 redmeption in August, had fixed the assured repurchase price at Rs 10 per unit for august and would increase by 10 paisa every month till May 2003. Replying to a related query on whether UTI had made any proposal to Infosys, he said, “No”. According to infosys, UTI currently holds 5.7 per cent equity, which translates into 37,72,035 shares, in the Nasdaq listed IT company.
PTI |
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Direct tax collections up
New Delhi, December 6 Although gross direct tax mop up was higher, net collections of Rs 31,851 crore was 0.4 per cent less than Rs 31,975 crore during April-November 2000, official sources said here today. In net terms, direct tax collections accounted for 37.4 per cent of budgeted Rs 85,275 crore for the entire fiscal. Net collection in direct taxes was less on account of heavy refunds of Rs 12,158 crore till November, which is 44 per cent more than Rs 8,437 crore refunded during the same period last fiscal.
PTI |
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Rites bags contracts
New Delhi, December 6 The contract was signed here during the visit of Rul Fonseca, President and Chairman of the Board of Directors, Mozambique Railways and Vice-Chairman of the Board of Directors of CEAR. A press release issued by Rites here yesterday said Rites would provide services of experts for the positions of Chief Executive Officer and Chief Finance Officer for CEAR.
TNS |
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SBI interlinks ATM in 9 cities Chandigarh, December 6 Lt Gen JFR Jacob, Governor Punjab and UT Administrator inaugurated the two new services by the bank here today. “The customers will now be able to transact business through their ATMs in any of these branches”, said Mr S. Govindarajan, Managing Director of the bank while speaking at the inaugural function. He said that Chandigarh is now the ninth city after Mumbai, Hyderabad, Chennai, Ahmedabad, Pune, Kolkata, Delhi and Bangalore and soon the bank will include other cities including Bhopal, Bhubaneswar, Gauwhati, Lucknow and Patna. The hub and spokes facility will enhance customer convenience and meet their loan processing and disbursement process faster at any of the 14 branches of the bank in the city, said he. The network spread across the city branches will ensure that whenever a loan application is filed in any of the identified branches, the application will instantly reach the designated officer at the ‘Hub’ where it will be immediately processed. Mr Govindarajan said SBI has 2,700 fully computerised branches covering almost 80 per cent of the bank’s business across the country and by March 2002 the bank plans to computerise all its branches. “The bank will continue taking initiatives in introducing new services like the tele-banking, networking of branches, electronic payment system for faster remittances and speedier collection of outstation instruments etc”, said he. Mr Rajinder Kakkar,Chief General Manager and Mr D.L. Manwani, were also present on the occasion. |
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Escotel slashes call charges Chandigarh, December 6 “With this we expect to increase our customer base in the state to one lakh by February, said Mr Deepak Khanna, Chief Operating Officer, Escotel, Haryana. On post-paid connections, the customer will now pay a flat tariff of Rs 2.40 per minute under the new Value Plus Tariff Plan where the monthly rental will be Rs 299. Under the Millennium Plan, the incoming call charges have now dropped to Rs 1.20 per minute. “One of the best options will be the new value tariff plan under which the incoming call charges are only Rs 1.20 for two minutes and Rs 1.20 in case of outgoing calls”, said Mr Khanna .The CLI facility will be charged at Rs 50 per month. In case of pre-paid, every call will be charged for Rs 3 per 30 seconds for outgoing and Rs 3 per minute for incoming. |
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Canara Bank Oriental Bank Mr S.K Sharma of Swaraj Mazda, who has been elected national Vice-President of the Indian Institute of Materials Managament for two years (2001-03).
OC
Lufthansa Cargo |
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